OM Kotak FY04 premium vaults 263%

TNNApr 29, 2004, 10.40pm IST

MUMBAI: OM Kotak Mahindra Life Insurance has ended `03-04 with a premium from policies sold during the year amounting to Rs 127 crore, an increase of 263% over Rs 35 crore a year ago. Total premium, including renewal premium from policies sold in the earlier years amounted to Rs 153 crore.

The growth was achieved by targeting a higher premium per policy. Although number of policies sold grew by only 53% to 52,000, the average premium per policy rose to Rs 20,400."We had increased the minimum premium under our policies from Rs 2,000 to Rs 6,000 in two phases during the year," said Shivaji Dam, managing director OMKM. He added that in some products the minimum premium was Rs 10,000. Another reason for the surge in premium was the involvement of Kotak group companies in distribution.

During the year Kotak Securities - the group's broking arm and Kotak Bank accounted for one fifth of the total new premium. Mr Dam said that the brand spend has resulted in an increased awareness, besides after watching the private companies for two years, customers were willing to diversify their insurance purchases by trying out new insurers.

Commenting on plans for the current financial year, Mr Dam said that the company had made a beginning with group insurance and has generated group business of Rs 10 crore in `03-04 against the Rs 1 crore in the preceding year. The company has entered into an agreement with Swiss Life for reinsurance and was hopeful of getting group business from multinational clients of Swiss Life which are present in India.

During the current fiscal the company was targeting 45% of its premium income to be generated from tied agents, 45% from alternate channels including Kotak group companies and 10% from group businesss. The company had sought IRDA approval for a new term insurance plan with return of premium, which can be sold across bank counters without medical tests.